reserves and the transformation of the Executive and Legislative Councils into Municipal bodies.
In other
words, China is only prepared to discuss with the British matters relating to the 14 year transitional period before 1997. and not post 1997 problems. China considers that Hong Kong questions after expiry of the New Territories lease are a matter for China and do not concern other countries. According to these sources, China's preliminary suggestions on the self rule question were that senior government posts should, within the next 7 or 8 years, be filled by Hong Kong Chinese people to provide for the transition and administrative power. The Chinese side
hope that in the next 2 to 3 years some Hong Kong Chinese people could be promoted to senior positions. By 1997, the British flag would be replaced by the Chinese flag. The Governor, the Secretary for Security and the Commander of the British Forces and others would have to return to
Britain.
On the currency question, the sources pointed out that China wished the Hong Kong & Shanghai Bank and the
7.
Chartered Bank to co-operate in issuing Hong Kong's banknotes. But if the British side made difficulties, they might consider inviting Japanese and American banks to help the Bank of
China issue Hong Kong banknotes.
8.
On the question of selection of the Chinese negotiating team for the talks on Hong Kong's future, the source pointed out that, because the talks had for the past six months been of a preliminary and procedural nature, and because the formal talks had not yet begun, the Chinese side had not yet finalised its team for the negotiations, The British were in a similar position. At present, the only contact was between the British Ambassador to China and a representative of the Chinese Foreign Ministry. These well informed sources also said that YAO Guang was a very probable candidate to be the Chief Chinese Negotiator. The possibility of other high
The ranking officials taking part could not be ruled out. British side also had to consider appointing its negotiators.
19.